(Reuters) -India’s biggest winemaker Sula Vineyards reported a nearly 4% fall in fourth-quarter profit on Thursday, hurt by a prolonged slowdown in urban consumption.
Demand for discretionary goods remains weak in Indian cities and towns due to high living costs and sluggish wage growth, despite easing inflation.
Sula gets about 90% of its revenue from urban markets.
The company’s consolidated net profit fell to 130.03 million rupees ($1.5 million) in the quarter ending March 31, from 135.5 million rupees a year ago.
The continued slowdown in urban consumption and short-term destocking in a few states were among reasons for subdued sales in the quarter, Chief Executive Officer Rajeev Samant said.
The winemaker’s own brands segment, which contributed to 82% of the total revenue, saw a 2.9% decline in revenue during the quarter.
Its smaller wine tourism segment saw a 24.6% increase in revenue, mainly driven by sales from its “Sulafest” in February.
Total revenue rose marginally to 1.33 billion rupees from 1.32 billion rupees a year ago, while total expenses rose about 3% to 1.21 billion rupees.
Sula’s core profit margin contracted to 21.4% from 22.4% a year ago.
($1 = 85.3990 Indian rupees)
(Reporting by Ananta Agarwal in Bengaluru; Editing by Krishna Chandra Eluri)
